Allot (ALLT) AI Stock Analysis

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Allot

(NASDAQ:ALLT)

Rating:53Neutral

Price Target:―

Allot's stock score reflects a company in recovery mode, with improving cash flows and gross margins counterbalanced by ongoing challenges in profitability and valuation. The technical indicators suggest caution, as the stock trades below key moving averages. Positive highlights from the recent earnings call, including strategic partnerships and a return to profitability, offer some optimism for future growth. However, sustained improvement in financial and operational metrics is crucial to enhance investor confidence.

Positive Factors

Strategic Partnerships

Strategic partnerships with major telecom operators enhance Allot's market position and provide a stable revenue stream, supporting long-term growth.

CCaaS Revenue Growth

Strong growth in the CCaaS segment indicates Allot's successful expansion in cybersecurity services, a key area for future revenue and market leadership.

Improved Gross Margins

Improved gross margins reflect better cost management and pricing power, enhancing Allot's profitability and competitive advantage in the industry.

Negative Factors

Decline in Product Revenue

A significant decline in product revenue suggests potential challenges in product sales and market demand, which could impact future revenue stability.

Rising Leverage

Increasing leverage may strain Allot's financial flexibility and increase risk, potentially affecting its ability to invest in growth opportunities.

Negative Net Profit Margin

Persistent unprofitability and negative net profit margins indicate ongoing operational challenges, which could hinder long-term financial health and investor confidence.

Allot (ALLT) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$390.62M

Dividend YieldN/A

Average Volume (3M)546.90K

Price to Earnings (P/E)―

Beta (1Y)1.35

Revenue Growth4.74%

EPS Growth94.70%

CountryUS

Employees523

SectorTechnology

Sector Strength85

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)0.03

Shares Outstanding44,744,392

10 Day Avg. Volume605,132

30 Day Avg. Volume546,897

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap0.77

Enterprise Value/Revenue3.14

Enterprise Value/Gross Profit4.48

Enterprise Value/Ebitda60.86

Forecast

1Y Price Target

$15.00

Price Target Upside73.81% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Allot Business Overview & Revenue Model

Company DescriptionAllot (ALLT) is a leading global provider of innovative network intelligence and security solutions for service providers and enterprises. The company's core products and services include network traffic management, network security, and deep packet inspection (DPI) technologies. Allot's solutions empower its customers to optimize network performance, enhance user experience, and secure networks against cyber threats.

How the Company Makes MoneyAllot makes money primarily through the sale of its network intelligence and security solutions to telecommunications service providers and enterprises. The company's revenue model includes the sale of hardware, software licenses, and recurring revenue from maintenance and support contracts. Allot also generates revenue through its security-as-a-service offerings, which provide ongoing network protection and management. Key revenue streams include direct sales to telecom operators, ISPs, and large enterprises, as well as strategic partnerships and collaborations with technology vendors and service providers to integrate Allot's solutions into broader service offerings.

Allot Earnings Call Summary

Earnings Call Date:Aug 14, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 05, 2025

Earnings Call Sentiment Positive

The earnings call highlights significant growth in Allot's SECaaS offerings and overall revenue, along with strategic partnerships and a strong financial position. Despite the challenges of long sales cycles in the telco market, the company's strong performance and strategic wins suggest a positive outlook.

Q2-2025 Updates

Positive Updates

SECaaS ARR Growth

SECaaS ARR was up 73% year-over-year, reaching $25.2 million, contributing over 1/4 of revenues for the first time.

Overall Revenue Growth

Allot reported a 9% year-over-year overall revenue growth with improved margins, profitability, and solid operating cash generation.

Verizon Business Partnership

The launch of Verizon Business's My Biz Plan contributed meaningfully to results, offering Allot's cybersecurity protection as a default. This partnership represents a significant long-term growth opportunity.

Strong Financial Position

Completed a share offering and ended the quarter with over $72 million in net cash and equivalents, with no debt.

Landmark Deal with Tier 1 Telco

Signed a multimillion-dollar agreement with a Tier 1 telco in EMEA, expected to contribute significantly to future growth over 2026 and 2027.

Non-GAAP Gross Margin Increase

Non-GAAP gross margin in the quarter was 73.4%, compared with 70.6% in the same quarter last year.

Negative Updates

Long Sales Cycles

Large telco deals continue to have long sales cycles, sometimes taking 12 to 24 months or longer.

Company Guidance

During Allot's conference call to discuss the financial results for the second quarter of 2025, the company reported strong performance across several metrics. The SECaaS (Security as a Service) annual recurring revenue (ARR) increased by 73% year-over-year, reaching $25.2 million, and contributed over 27% of the company’s total revenue, which grew by 9% year-over-year to $24.1 million. The company also achieved a non-GAAP gross margin of 73.4%, an improvement from 70.6% in the same quarter last year. Allot successfully strengthened its balance sheet, ending the quarter with $72 million in net cash and no debt, following a $46 million follow-on share offering. The company's SECaaS strategy is propelling growth, with a notable partnership with Verizon Business contributing significantly to revenue. Allot is optimistic about its future, raising its 2025 SECaaS ARR growth expectations to between 55% and 60% and projecting overall revenues of between $98 million and $102 million for the year.

Allot Financial Statement Overview

Summary

Allot is experiencing challenges in achieving profitability with declining revenues and negative net profit margins. However, improvements in cash flow and gross profit margins offer some positive signals. The balance sheet shows manageable but increasing leverage, and the overall financial health requires a focus on cost management and revenue growth.

Income Statement

Neutral

Allot's revenue decreased by 1.03% from 2023 to 2024, and the company has been facing a declining trend since 2021. Gross Profit Margin improved to 69.1% in 2024 from 56.56% in 2023, yet the company remains unprofitable with a negative Net Profit Margin of -6.37% in 2024. The EBIT and EBITDA margins improved but are still negative, indicating operational challenges.

Balance Sheet

Neutral

The debt-to-equity ratio increased slightly to 0.93 in 2024 from 0.84 in 2023, showing a manageable but rising leverage level. The equity ratio decreased to 35.66% in 2024, indicating lower asset financing through equity. Return on Equity remained negative due to consistent net losses, which is concerning for shareholder returns.

Cash Flow

Neutral

Allot's cash flow improved in 2024, with a positive Operating Cash Flow of $4.83M compared to negative in 2023. Free Cash Flow also turned positive at $2.71M in 2024, reflecting better cash management. However, the Free Cash Flow to Net Income ratio remains weak due to continuing net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	95.34M	92.19M	93.15M	122.74M	145.60M	135.92M
Gross Profit	66.79M	63.69M	52.69M	82.91M	101.05M	95.84M
EBITDA	4.92M	2.12M	-55.13M	-22.75M	-7.95M	-2.86M
Net Income	-2.02M	-5.87M	-62.80M	-32.03M	-15.04M	-9.35M
Balance Sheet
Total Assets	154.05M	139.64M	138.16M	212.95M	203.41M	201.60M
Cash, Cash Equivalents and Short-Term Investments	49.51M	57.86M	53.05M	85.35M	83.97M	98.00M
Total Debt	6.09M	46.34M	41.93M	44.70M	8.25M	4.65M
Total Liabilities	54.34M	89.83M	88.40M	110.98M	77.41M	71.45M
Stockholders Equity	99.72M	49.81M	49.76M	101.97M	126.01M	130.15M
Cash Flow
Free Cash Flow	10.61M	2.71M	-32.23M	-38.21M	-16.01M	-19.81M
Operating Cash Flow	12.03M	4.83M	-29.74M	-32.56M	-8.37M	-12.22M
Investing Cash Flow	-7.49M	-2.88M	31.63M	-6.51M	-6.32M	17.06M
Financing Cash Flow	6.52M	1.00K	0.00	39.66M	2.81M	1.83M

Allot Technical Analysis

Technical Analysis Sentiment

Positive

Last Price8.63

Price Trends

50DMA

8.13

Positive

100DMA

7.88

Positive

200DMA

7.05

Positive

Market Momentum

MACD

0.21

Negative

RSI

60.84

Neutral

STOCH

88.05

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALLT, the sentiment is Positive. The current price of 8.63 is above the 20-day moving average (MA) of 7.94, above the 50-day MA of 8.13, and above the 200-day MA of 7.05, indicating a bullish trend. The MACD of 0.21 indicates Negative momentum. The RSI at 60.84 is Neutral, neither overbought nor oversold. The STOCH value of 88.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALLT.

Allot Risk Analysis

Allot disclosed 44 risk factors in its most recent earnings report. Allot reported the most risks in the "Tech & Innovation" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Allot Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATEN	76 Outperform	$1.26B	25.47	24.39%	1.38%	11.04%	18.70%
VRNT	72 Outperform	$1.23B	30.84	4.72%	―	-2.32%	7.70%
RELY	69 Neutral	$4.11B	324.52	2.10%	―	35.12%	―
SPSC	67 Neutral	$4.19B	51.00	10.03%	―	20.51%	12.84%
Sector *	61 Neutral	$36.58B	11.16	-10.39%	1.86%	8.71%	-7.09%
CFLT	57 Neutral	$6.98B	―	-32.18%	―	23.02%	21.01%
ALLT	53 Neutral	$390.62M	―	-2.77%	―	4.74%	94.70%

* Technology Sector Average

Performance Comparison

ALLT

Allot

8.63

5.63

187.67%

SPSC

SPS Commerce

110.39

-76.50

-40.93%

VRNT

Verint Systems

20.33

-5.63

-21.69%

ATEN

A10 Networks

17.42

4.56

35.46%

CFLT

Confluent

20.01

0.52

2.67%

RELY

Remitly Global

18.87

5.10

37.04%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Apr 23, 2025